SUMMARY: In email publishing, you're darn lucky if you crack 25% open rate for newsletters to consumers. So how does Arcamax get *consistent* 45% open rates for more than 600 daily titles? Plus -- here's the glorious part -- these newsletters have no editorial costs or writing staff. But sponsors appear to adore them.

In the flood of ad dollars moving online, email newsletter publisher's ships are also rising.

Advertisers and sponsors are extremely interested in buying space in email newsletters. However, they're not willing to pay much more than they do for the same CPM or clicks that they would for a similar Web ad. But, unlike Web traffic, which can be anyone you've lured to your open access site, email readers must be opt-in, which brings costs up.

Not only do you have to opt-in (register) thousands of these readers in advance of selling your ads, you also have to keep the content so fascinating to them that they are willing to open issues (thus viewing the ads) despite mailbox clutter. And, to make the business cost-effective, you need to keep each opt-in opening issues and clicking on ads for as long as possible.

Unfortunately that's one thing the media business sucks at. Email newsletters published by media companies have the worst drop-off rate of unsubscribes and hard bounces of any measured niche. Partly, we suspect that's because media companies tend to publish more frequently than other mailers.

Open rates and interest can sag when you publish weekly or daily issues because you want to profit from selling more ads. Few email recipients are truly passionate about a topic to want to open newsletters on it that frequently. Open rates sag, and then so does lifetime value.

Arcamax Publishing, a spin-off of Arcamax Inc, has been publishing email newsletters with an ad sales revenue model since 1999. Because especially at the start, email advertisers measured success on a CPA or CPC basis (regardless of whether the ad was paid for on CPM) the team realized their long-term profits depended on only emailing to high quality readers -- consumers who would open and click eagerly for an extended period of time.

This meant they went against the current online publishing model in two ways.

#1. No consumer would be added to a particular list without express, voluntary permission. Arcamax would not use a "generic" opt-in where people signed up for a family of newsletters. Every time the company launched a new title, it would start the list at zero.

#2. All lists were double opt-in, meaning that consumers had to sign up online and then check their in-box in order to respond to a confirming email before they would be added to the main list. Non-respondents were dropped.

Signing up new names would be harder, take longer and possibly cost more. However, those names would be more likely to stick around for a longer time, open more issues and click on sponsor's ads.

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The team focused on creating three lines of daily content offerings they hoped would be "must-open."

#1. Syndicated newspaper features

The company launched about 40 separate titles using content from partners like UPI and King Features Syndicate, covering topics including comic strips such as Garfield, news headlines, sports, gardening tips and recipes.

“We’re in the features business,” says President and CEO Scott Wolf. “We’re like the Sunday newspaper without the front page.”

#2. Games and brain teasers

The company launched a daily games email newsletter in February 2006, featuring small games and brain teasers.

#3. Books

“You might skip a comic strip one day, but a book you’re going to read every day, if you’re hooked,” Wolf says.

The idea: Take older famous books no longer protected by copyright -- such as 'War and Peace,' 'the Bible' and 'Pride and Prejudice' -- break them into segments and offer the segments to readers via daily email. The average book would have 27 daily segments.

Instead of just launching one book, the team decided to launch an entire library of hundreds of titles to ensure that readers would hopefully sign up for a new title when they finished the one they were reading. Thus each opt-in account would have a longer shelf life.

Plus the team developed proprietary technology to allow readers to visit the Web site, read as much as they wanted and then click on a form to let their daily newsletter subscription know where to pick up in the story the very next day. (This last idea got the whole team excited. Wolf says, “Everybody lit up. There was a sense of urgency around the company.”)

Subscriptions to all these daily newsletters were free of charge and marketed mainly via the Web site itself, which is built as a subscription-generating tool. Most pages of the site feature an opt-in subscription form above the fold, and many pages include subscription offers at the bottom of the page as well.

It’s easy to get caught up in acquiring new readers, but getting more attention from your existing readers is vital for profitability, Wolf says.

“Suddenly, you’ve got a bigger share of their reading time,” he explains. “If there’s two or three titles they like, that’s a core reader. That’s a person you build the company around. What we’ve worked really hard at is upselling the people we get in the door.” Three specific tactics are used.

#1. Confirm page co-registration

When a new opt-in clicks on his or her confirmation email link to be added to the permanent list, they are at their highest level of interaction with the brand. That's the perfect time to ask them if they want something else in addition.

So, Arcamax tested adding anywhere from two to ten co-registration newsletter offers on that page (link to sample screenshot below).

#2. Free offer promotions

Arcamax used promotions – such as gift card giveways -- to increase readership for individual titles. For example, readers of selected newsletters recently saw an ad saying subscribers to the parenting newsletter will be eligible for a gift card contest. A holiday recipe contest drew readers to the recipe-minded newsletter.

Arcamax Publishing currently has about 1.5 million unique opt-in readers and 2.5 million opt-in subscriptions, since many readers opt for more than one title at a time.

“We’re bringing 100,000 new subscribers through the door in any month, most of which are for ezines."

About 50% of the people who request a cartoon, news or game email newsletter subscription from Arcamax go ahead and confirm. However, 67% of the people who sign up for a book confirm their subscriptions.

Cross-promoting on the confirmation page works moderately well. "We find about 10% of people will take another newsletter on the way in,” Wolf says. The team has discovered for their demographic the optimum number of co-registration newsletter offers is no more than two-three titles. “If you’re offering 10, it’s too many.”

Book segment emails also get higher than average open rates. On any given day, about 45% of the book emails are opened. That compares to an open rate of about 25% on the company’s other email titles.

“We’re very happy to see people are keeping the book subscriptions alive,” Wolf says. “We’re finding about 80% of the subscriptions are either open, or they’ve finished the book. We’ve only had about 20% unsubscribe.”

That's why currently the company offers about 600 book titles (including individual books of the Bible) and adds 80-100 books to the subscription choices library per month. Daily readers number 30,000.

BTW: If you're considering running book content yourself, be aware that Arcamax just applied for a patent around its system of marrying the emails with the book content on its web pages.

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